Senior Director of KCGF Applied Pressure

In relation to the incident that Korea Credit Guarantee Fund (KCGF) suffered a loss of 4 billion won from a negotiable bill fraud in 1999, it was confirmed that, unlike the KCGF`s explanation, Senior Director of KCGF Sohn Yong-Mun (a director at that time) had made strong demands on the workers in charge to give guarantee for the companies that the swindler group had been running. In addition, the KCGF was suspected of having concealed the incident systematically as they had covered up Senior Director Sohn`s involvement in corruption at the inspection from the Board of Audit and Inspection of Korea and the prosecution`s investigation.

`Notification of Suspicion of Senior Director`s Involvement in Corruption Case`, which this newspaper gained exclusively, is an internal document that a supervisor of the KCGF sent to the chairman of the KCGF in July, on which it is written ``necessarily measures should be undertaken as the senior director is suspected of having had close relationship with the swindler group which caused damage on the KCGF and involved in illegal credit guarantee and negotiable bill insurance.`` The inspection team of the KCGF made this document to report to the chairman on July 27 as a result of inspection conducted over 7 months from Nov. 2000, in which Senior Director Sohn`s applying pressure for improper guarantee had been confirmed. In September, after the report of inspection was sent to the chairman, the KCGF requested an official investigation of Seoul District Prosecutor`s Office into 9 principal offenders and 28 associates but omitted the part concerned with Senior Director Sohn. KCGF also recorded a testimony of a person deeply concerned, which could raise suspicions of a link between S, the principal offender of the incident, and Senior Director Sohn, but did not inform the Prosecutor`s Office.

Prior to this, the inspection team of the KCGF considered making a suggestion to the chairman in early June that ``Senior Sohn be suspended from his office for smooth inspection.`` but withdrew it regarding the fact that the chairman does not appoint the position of senior director.

The KCGF Chairman Lee Jong-sung said, ``The request for the prosecution`s investigation required circumspection because the person concerned was a high-ranking official, and the decision will be made soon regarding how to deal with him.``

Park Rae-Jeong ecopark@donga.com